The study results come just weeks after Amazon announced its third round of price cuts at the supermarket.
Last month, Amazon announced its third round of price cuts at Whole Foods, promising lower prices on hundreds of items—mainly, an emphasis on “high quality, peak-of-season produce, including greens, tomatoes, tropical fruits and more.” The chain listed organic bunched rainbow chard and large yellow mangoes as examples; on average, customers could expect a reduction of 20 percent on select items, with a promise that the store would maintain its high quality standards. However, recent findings from Bank of America Merrill Lynch show that despite these cuts, Whole Foods still has the highest overall prices among other U.S. grocers, reports , and by a significant margin.
“In our most recent price study in Philadelphia, Whole Foods’ basket was still priced at a +39% premium to Walmart. Produce [was] still at a +25% basket premium to Walmart, and center-of-store items at a +58% premium to Walmart,” Bank of America analyst Robert Ohmes told CNBC.
Bank of America Merrill Lynch analysts conducted 10 studies in eight metro areas over the last year, with the final study after Amazon’s cuts went into effect—as it turns out, Walmart still has the lowest prices by far. Whole Foods prices came out at 34 percent above Walmart, Sprouts Farmers Market ended up with an eight percent premium, and Kroger at seven percent. According to the study results, while Whole Foods did reduce produce prices, the cuts weren’t as competitive in the “center of the store;” plus, the price gap between organic produce and regular produce is shrinking, thanks to stores like Walmart and Target selling more of the former, per CNBC.
Walmart also upped the competition by announcing in April that customers can now order their groceries through Google Assistant—a first for the brand, and likely a direct response to the Whole Foods/Alexa partnership through Amazon. All they need to do is say “Hey Google, talk to Walmart,” and Google will add items to their grocery cart. The technology also remembers your preferences—for example, if you consistently order the same brand of almond milk, that type will be added to your cart when you say “almond milk,” without you having to specify. To learn more about the program, check out the full story.